Democracies are believed to be slower in carrying out reforms. But new research shows this works differently during economic downturns. Heightened public discourse in such times paves the way for economic reforms quicker in democracies than in autocracies, says a study.
The analysis, by World Bank economist Rabah Arezki and others, uses newspaper articles to find that “reform chatter” tends to rise during economic slowdowns. But the increase is more significant in democracies than in other forms of government, the paper finds.
The authors run a text analysis on around a billion articles in 28 languages published across the world during 1980-2018. The articles are accessed from Dow Jones Factiva, a global media repository. The paper measures the chatter based on words related to the economy and economic reforms.
The positive impact of a 1% gross domestic product (GDP) slowdown on reform chatter is found to be 0.12 percentage points more in democracies than in autocracies, the authors say. Ups and downs in economic growth have no significant impact on reform chatter in autocracies.
The rise in media chatter in democracies is possible because they have more public discussion on reforms in difficult times, the authors say.
A sentiment analysis of the media coverage shows that apart from the increase in intensity of reform chatter during downturns, there is more support for bringing reforms than opposition towards it. This positive attitude is stronger in democracies, and this leads to actual reforms and “self-correction”, the paper says.
High intensity of reform chatter and a positive attitude towards reforms during economic downturns give democracies an added advantage in executing new economic policies. Thus, the criticism of democracies being less responsive and efficient does not always stand, claim the authors.
Also read: Reform Chatter and Democracy
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